WASHINGTON -- President Barack Obama saluted a new spirit of political compromise Friday as he signed into law a huge tax bill extending cuts for all Americans - including benefits for the rich that he and congressional liberals had denounced - along with billions of dollars in help for the middle class and jobless workers.
"It's a good deal for the American people; this is progress and that's what they sent us here to achieve," Obama said as a rare bipartisan assembly of lawmakers looked on.
The package retains Bush-era tax rates for all taxpayers, from the working poor to the wealthiest. It also offers 13 months of extended benefits to the unemployed and attempts to stimulate the economy with a Social Security payroll tax cut for all workers.
At a cost of $858 billion over two years, the deal contains provisions dear to both Democrats and Republicans. It represents the most money that Obama was likely to have been able to dedicate over the next year to a slowly recovering economy, at the same time increasing the federal deficit at a time when the country is growing increasingly anxious about the red ink.
Dramatic both as an economic and a political accomplishment, the agreement sets the stage for Obama's new relationship with Congress in the aftermath of devastating November elections for Democrats that stripped them of control of the House.
Obama called for maintaining the spirit of cooperation.
"I'm also hopeful that we might refresh the American people's faith in the capability of their leaders to govern in challenging times," he said. "Belief in the capacity of their institutions in this town to deliver in a rapidly changing world, and, most of all, confidence that our best days as a nation are still ahead of us."
Obama conceded that the White House and Congress face a difficult challenge when it comes to controlling the deficit and tackling the nation's debt.
"In some ways this was easier than some of the tougher choices we're going to have to make next year," he said.
To strike the bargain, Obama had to set aside his vow to extend tax cuts only for the middle class and lower wage earners. The measure also enacts an estate tax that is more generous to the wealthy than Obama had sought.
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